30 Jan 19

French leasing market up 1.86% in 2018

Faced with uncertainty over WLTP and diesel, the leasing market in France nevertheless managed to grow 1.86% last year, French leasing association SesamLLD announced.

Of the 2,534,607 new vehicles (<3.5 tons) registered last year in France (pictured: Quai Richelieu, Bordeaux), 562,646 were under leasing contract. That’s 10,256 units more than in 2017, or +1.86%.

Companies and professionals
Leasing represented 58.53% of all new-vehicle registrations for French companies and professionals in 2018, or 432,153 units out of a total of 738,346. That figure is 9.45% for national and local governments, 21.47% for rental car companies and 3.2% for private consumers. 

The growth of leasing was a bit below that of the overall vehicle market (+2.89% to 2,534,607 new cars and LCVs), so its penetration rate declined from 22.42% in 2017 to 22.2%. 

In all, leasing operators in France had 1,448,178 vehicles in their fleets (+6.74%), and managed a further 425,958 vehicles for others (+10.72%). That’s a total of 1,874,136 vehicles (+7.62%). The increase is the result of the ongoing expansion of leasing in the SME segment and, to a smaller extent, private customers. 

Powertrain equation
Once, French corporate fleets were diesel by default. That’s changing fast. The powertrain equation in the French leasing market (cars and LCVs) looked like this at the end of 2018:

  • Diesel: 410,207 units (-8.6% vs. 2017)
  • Petrol: 126,757 units (+47.7%)
  • Hybrid: 16,962 units (+56.9%)
  • Electric: 8,469 units (+25.5%)

Over the whole year, diesel had a market share of 72.91%, petrol 22.53%, hybrids 3.01% and EVs 1.51%. But those figures don’t adequately reflect the huge shift that took place last year. Only in January, diesel still had a share of 78.77%. By December, that had fallen to 67.81%. Inversely, petrol increased its share from 16.58% at the start of the year to 26.59% at the end of it. 

Diesel does remain the most profitable and most chosen motorisation for certain circumstances, notably for the 42-month, 98,000-km contract type. 

Due to the rising popularity of petrol, the average CO2 emissions of France’s overall leasing fleet have risen by two points, to 109.35 g/km. Meanwhile, the average emissions of France’s overall fleet have only risen by a single point, to 114.39 g/km.  

The transition from NEDC to WLTP for car model emissions values, a change with major fiscal consequences, is scheduled for September 2019. The first cars will come onto the market in the new, as yet unknown fiscal regime from January 2020. Specialists predict WLTP will impact mainly medium to high-range vehicle segments (as the smaller ones have already transitioned to below 100 g/km).

Even if TVS (company car tax) and the malus (a purchase tax on CO2 emissions) themselves won’t change, the introduction of WLTP will lead to an increase in TVS of between €91 and €1,500 and of €75 to €2,500 for the malus, SesamLLD said, basing itself on the Finnish example. 

Authored by: Frank Jacobs